Murabahah Bonds

Definition of "Murabahah Bonds"

A financial instrument proposed for obtaining debt by the government within the interest-free framework. The certificate can be issued by the government in the following manner: The government may appoint one of its agencies to procure goods and services for it. The agency will float murabahah bonds and collect public funds. With these funds, it will procure goods and services and sell them to the government on a mark up. The certificate holders will be entitled to profit on the sale.